Bill to Limit Credit Report Check Proposed

By Faye MergelPublished: Saturday, September 26th, 2009

According to the Society for Human Resource Management, 43% of employers pull out credit reports of job applicants as part of their background check. However, this practice could change by the end of the week. Antonio “Tony” Mendoza of the 56th District in California aims to pass a bill which will limit job categories for which employers can check the financial and debt status of candidates.

Assembly Bill 943 will prohibit employers from checking credit reports of job candidates unless it is highly relevant to the position being sought after. Employers can only do a check when a person is applying for a managerial position, a position in the local government, a peace officer or law enforcement profession, and jobs which involve access to and handling of money, assets, and confidential information.

Supporters of AB 943 argue that it is ironic that a poor debt standing keeps a person from getting work. This will only deprive him of the opportunity to pay off his balances and improve his credit report. Tony Mendoza also says that work history should be a primary factor in hiring a work aspirant.

Civil rights organizations, on their part, say that it is particularly disadvantageous to minorities and women. These people often have little credit history and their reports may not appear as plausible as that of others. Academic studies also show that there is very little connection between work performance of a person and his credit report. Critics support this view as well. They add that being denied a job because of financial status will only push an individual deeper into debt.

On the other hand, the California Chamber of Commerce says that AB 943 may hamper economic growth. They argue that there are important personal and professional backgrounds which do not appear in resumes and job interviews.

However, critics retort that it is only natural because of the present recession, that the debt standings of many applicants are poor. Many consumers default their loans and file foreclosures simply because they have lost their jobs at the toughest times. The increasing cases of identity theft also contribute to poor credit reports. Divorce and medical bills make it more difficult for consumers to handle their debt despite all their effort.

Just last year, California governor Arnold Schwarzenegger vetoed a similar bill. When asked about his view on AB 943, his spokesperson says the former Terminator has not taken a position yet. Majority of unemployed individuals can only hope that the tides will turn in their favor.